People touting CTL as the solution to our petroleum ills shouldn't take this as cause for optimism. The US consumed almost 7.5 billion barrels of petroleum products in 2005 (20,656,000 barrels/day); this plant can produce only 0.47% of that. It would take 214 of them to replace our petroleum usage... if we could get the coal to feed them. The US uses roughly 1 billion tons of coal per year (mostly to make electricity), but that much CTL would require mining another 1.5 billion tons/year. And shipping it, and disposing of the ash....

Cost is another factor. Unless those plants get much cheaper with experience, a nation-full of them would cost somewhere north of $800 billion. That cost has to be paid off, the coal has to be paid for (1.5 billion tons/year @ maybe $35/ton is $52.5 billion/year or $1.05 trillion over 20 years), and we'll need rail lines to transport it and landfills for the ash. Already we're looking at a couple trillion dollars, ignoring pollution and climate impacts. And all of that is just to feed vehicles.

The claim of coal consumption is probably low. 7 million tons/year at 25 million BTU/ton is 175 trillion BTU, but 1.47 billion gallons of fuel at 131,000 BTU/gallon (half gasoline, half diesel) is 193 trillion BTU. Either that plant can make something for nothing, or it is going to turn more coal into less product.

That road looks bad. Isn't there a better way to go?

Suppose we took the incentives aimed at fossil fuels and instead directed them to... batteries.

Lithium-ion batteries currently retail for about $.69/Wh. Putting an average of 2 kWh of battery storage on new vehicles would, at US sales of ~13 million/year, require about 26 GWh of batteries per year and cost a hair over $18 billion/year; this figure could be expected to drop rapidly. If these batteries allowed us to replace 50% of motor-fuel demand with electricity @ 300 Wh/mile, over 10 years we'd spend less than $180 billion on batteries (and much less over the next 10). Savings would be immense; if the average new vehicle travels 15,000 miles/year and average mileage doubles from 22 to 44 MPG, after 10 years those 130 million new vehicles would be using 44 billion gallons/year less fuel. At prices northward of $5/gallon, that would save at least $220 billion/year. Of course, we'd need electricity to make up for it. That would take roughly 290 billion kWh/year (about 7.5% of current US consumption), but if we got it half from wind at 4¢/kWh, 20% from nuclear at 5¢/kWh and 30% from coal at 10¢/kWh (with carbon taxes) we'd only be spending $17.6 billion/year for power.

Coal consumption would be way down. Producing 87.8 billion kWh/year from coal in IGCC plants achieving 8400 BTU/kWH would require 737 trillion BTU, less than 30 million tons of coal per year at 25 million BTU/ton. Compare to 1.5 BILLION tons! The cost for coal (included in the price of power above) would be maybe $1 billion/year. And the cost of batteries would probably fall by half within 5 years (allowing even more fuel savings for the same price), and by another 50% within the next ten.

This is how the accounting looks to me just over 10 years and assuming NO battery improvements over that time:

CTL

PHEV

$400 billion in CTL plants

$180 billion in batteries

750 million tons/year coal

30 million tons/year coal

$26 billion/year for coal

$1.05 billion/year for coal

No savings in liquid fuel

Roughly 1/3 savings in liquid fuel

Roughly today's noise and pollution

Radically reduced noise and pollution

If we are looking for good investments in America's future, batteries look like our best bet. The sign for Fischer-Tropsch is pointing down the road to ruin.

And on that note, I'm off until Friday night. Don't have too much fun without me.

Once again, some simple math proves the idiocy of the current direction the folks directing our energy future are taking us in.

Honestly, why can't the folks in charge simply figure out that electrification of transportation will set us on the right path and alleviate a whole host of problems that other 'alternatives' simply chip away at?!

Keep the excellent analysis coming. I'm gonna link to this post from Watthead as more folks should start to think like this.

1. If there's increased demand for electricity from an electrified transportation system, the coal is simply burned in power plants instead of converted to gasoline and diesel and used directly. I don't see how this results in decreased coal consumption--whatever change that caused coal's market share to go from 50% to 30% would be the cause.What is that change?

2. I do not see how wind can realistically provide over 30% or so of our electricity. Plus, how can a non-load-following nuclear or coal plant back up such an intermittent source? Are gas and hydro unimportant?

1. Consider the rough end-to-end efficiency of the two chains. Burn the coal in a power plant at 35% or so (and new technologies are poised to improve that substantially), then relatively minor losses due to transmission, storage, and use in an electric drive train. For the CTL path, convert to liquids at maybe 65% efficiency, then minor losses in transport, then run it through an ICE with maybe 20% efficiency. You end up with maybe 30% efficiency for the electric path, and something worse than 15% for the CTL. Expressed differently, the electric path only burns half as much coal to deliver a fixed amount of energy at the wheels. There are lots of details, but the bottom line won't be too far off from 2:1.

2. I believe that E-P was referring to getting half of the electricity needed for transportation from wind; using his figures, that would amount to a bit under 4% of the total electrical production, a very achievable number.

Hydrogen can be produced at high efficiency (~50%) from nuclear reactors that can produce high-temperature heat, such as the liquid-fluoride thorium reactor. Typically the hydrogen is generated from water using thermochemical processes and catalysts such as sulfur and iodine. With water as the feedstock, no CO2 or greenhouse gases are released during the hydrogen generation.

My friend Charles Forsberg of the Oak Ridge National Lab sent me a paper he recently wrote on the uses of nuclear-generated hydrogen. I was especially interested in the potential uses of nuclear hydrogen to generate liquid hydrocarbon fuels from carbon feedstocks such as biomass and coal.

The nuclear hydrogen is interesting, but what if we just used that reactor to produce more electricity, instead?

In all likelyhood, that would be more efficient than using the same amount of heat to make H2, then transporting it or combining it with other sources (which would also have to be transported) to make hydrocarbon fuels.

HiI read your recent comments on Biofuels on FuturePundit about Brazil's biofuel usage (and posted back as simon). I like your approach to the whole business of allowing for the logistical costs of alternative fuels. You might be interested, but I read that world demand for lithium is currently about 70 000 tonne/year lithium carbonate equivalent. A lot of that weight has got to be carbonate, it just makes me think that Lithium batteries may not get cheaper with mass production... but I like the cut of your jib. How about smaller autos....

2nd, at 300 whrs/mile you could only go 6 miles on a 2 kwhr battery. That's not going to get a big improvement in mileage. You'd need at least 6 kwhrs, and 10 would be better. That increases your costs by a factor of 5.

Finally, current li-ion's don't give that many cycles, maybe 500. Tesla says conventional li-ion batteries are $.40/whr (somewhat lower than your $.69 estimate) and their 20kwhr pack should last for 100,000 miles. That's a cost of $.20 per mile. You'll get a lower cost for plug-in's, but it's still significant, and higher than current gasoline costs. They expect the current trend of cost reduction per year of 8% to continue for at least the next 5 years. They also say they fully expect to move to safe and much more effective (more power/weight, faster charge/discharge, much longer lifetime) batteries like the A123systems in the next few years. I'm very hopeful for new nanotech li-ion's (whose much higher cycle life will slash cost/mile), but they're still in the testing stage, and it will probably take 5 years for them to be used in big volume, and their costs are still unclear.

This new project estimates $4B and 4 years construction time for 96k barrels/day. That gives a capital expenditure premium of $9.20 at 7% interest, or very roughly the cost of refining oil into fuel. Coal at $35/ton gives a fuel cost of $7/barrel. Even if these estimates are low they’re still much lower than current oil costs, and are likely to have a very fast payback.

What's the bottom line for this conflicting info? That batteries are not quite cheap enough yet (without carbon taxes), and that CTL is likely to expand very quickly in the absence of clear public policy on GHG's.

According to this chart: http://pubs.usgs.gov/fs/2002/fs087-02/images/fig04.gif lithium is of similar abundance to zinc or copper. Of course that doesn't necessarily mean it is easy to find or extract, but there is enough there. None the less, lithium will probably get more expensive before it gets cheaper.

re: wind energy

While wind energy is intermittent, electric cars can be left charging overnight, set so that they will only charge when there is surplus load on the grid. Other appliances can run in a similar manner. None the less some spare backup capacity will still be needed in at least the near future.

re: hydrogenHydrogen is a useful chemical feedstock, specifically, it is used to make ammonia. However, hydrogen is too bulky to make a practical fuel and a hydrogen distribution grid would be expensive and take a long time to build, and affordable fuel cells are still some ways away. A nuclear hydrogen plant would probably best serve as a supplier of hydrogen to other hydrogen consuming industrial sites.

One of the causes of inefficiency in CTL is the gasification process. One-step gasification has inherent entropy production that limits the yield.

One possible solution to this is chemical looping gasification. This class of processes breaks the gasification reaction down into two or more separate steps that can be conducted at different temperatures, increasing overall thermodynamic efficiency. They also may produce pure sidestreams of CO2 without the need for an air separation plant.

The chemical-looping scheme has an extra chemical step with losses (and unrecoverable energy). I don't see how it gets higher efficiency than conventional air separation, though it might well be cheaper.